Australian independent optical community George & Matilda Eyecare is now fully funded and financially structured to pursue its full business model. Having acquired 42 practices, the Group is ahead of its short-term practice acquisition plan and ahead of its stated target to acquire 250 practices within five years.
Its maiden financial report to ASIC, indicated that for the sixteen-month period to June 30 2017, the Group had incurred a net operating loss of AU$7,635,625. At the time of filing its results, George and Matilda had indicative approval from an investor for a significant debt facility; however, this could not be confirmed until after lodgement of the financial results. Completion of the debt facility subsequently occurred on 24 November, assuring George & Matilda’s long term funding and growth plan.
Significant Upfront Investment
CEO and major shareholder, Chris Beer said the Group’s historic 16 month results did not depict a true picture of its future performance because of significant start-up costs and investments in marketing platforms and supply chain technologies etc.
Chief Financial Officer, Geoffrey Greenberg said, “We ended the financial year with 36 practices, however at best, we only traded with all of those practices for six out of the 16 month results period.”
Although the June 30 2018 results will provide a clearer picture of the Group’s performance, investment in platforms and new practices will continue over the next three to four years, which will significantly skew future results.
Right from the start, Mr. Beer said the plan for George and Matilda was “to do things the right way”. He said well before approaching practices, it commenced a three year investment strategy to establish a digital platform that will help segment and manage customer / patient relationships, analyse buying behaviour and manage its supply chain.
“Our aim is to help our partner practices become as relevant and personalised as possible to consumers, customers and patients on their database. We’re working with one of Australia’s top analytics practices to build and implement advanced and targeted campaign automation on best of breed software. This is helping us analyse live response data to evaluate and refine campaign effectiveness.”
Mr. Greenberg added, “Health analytics are becoming common and because we’re a small company, the decision making authority resides locally, so we can be nimble and move fast to respond to the information that our digital platform provides us.”
Over time the data will also be used to help guide some of the group’s practices on stock selection. “We’re agnostic to the brands that practices stock and our partners usually have strong ideas of what works and what doesn’t within their market, but as the data comes to life, we will be able to show them the brands, look and feel that their customers really want,” said Mr. Beer.
He said a significant investment in a proprietary supply chain platform was now starting to drive efficiency and speed. “That’s taken some time but it’s pretty efficient now and the benefits will start flowing through to practices and the Group.”
George & Matilda Eyecare is now fully funded and financially structured to pursue its full business model
Creating a Culture of Ownership
The board members of George and Matilda are all shareholders, along with every practice partner and support centre team member. Mr. Beer and Mr. Greenberg said this is driving a culture of ownership and engagement, which is reassuring to practices as they come on board.
“Our practice partners’ have worked incredibly hard to build their businesses and therefore, this is a very personal decision for them. They’re trusting us and we greatly respect that. They want to know the team working to support them is as committed to their business as they are. I simply say, ‘everyone in my team is a shareholder – they’re all working to help you, no-one is here just to get their salary, they’re all just as invested in making your business successful as you are’. It’s a very different culture.”
With every member of the support team being a shareholder, Mr. Greenberg says the dynamics shift. “Everyone has a stake in the business – which means people behave differently and make different decisions (expenditure, efficiencies etc) because they own part of the business. We believe this is going to be a unique ingredient to our success,” he said.
A Public Company?
Right now George and Matilda is a public, unlisted company with around 50 shareholders and Mr. Beer says there are no plans to list the Group on the stock market.
“People keep talking about launching on the stock exchange in the next five years but that’s not my plan – it would be possible but I don’t think it’s the right thing for George and Matilda to do,” said Mr. Beer. “Stock markets aren’t interested in small assets, today’s investors are very sophisticated and you need to be prepared to have a shorter term mindset before you go down that path. George and Matilda has a longer term view on how the business should develop and it is important we give the business time to realise its ambitious agenda. But we are also conscious that partners hold stock in the Group and will wish for liquidity within a reasonable time frame to realise value.
“While I do not make public comments on the mergers of other companies, we do understand that there is significant change in market dynamics coming and nobody can be sure exactly what this will look like. However, George & Matilda Eyecare offers a significant measure of security and opportunity for those independent practices feeling uncertain about change. More than that, it is a chance for us to level the playing field by bringing our investments, technology and expertise to the country’s leading independents.